204 The Stock Market Crash—And After 
only way to stabilize income from bonds is to buy 
stocks as well, these also being diversified. The 
truth is, there is no way to get the gamble out of life 
altogether. Neither stocks nor bonds are really 
“safe” as to purchasing power. But the individual 
investor is at a great advantage when he pools his 
earnings and savings of those of a multitude of 
others in an investment trust, which with the aid of 
expert counsel keeps it invested in well-selected diver- 
sified stocks and preferred securities. 
Taking Risk from Speculation 
A little reasoning permits of a startling corollary. 
It is this: If we can, by sufficient diversification in 
investments, get a greater certainty and thus run 
less risks from our speculation, then the more un- 
safe the investments are, taken individually, the safer 
they are taken collectively, to say nothing of profit 
ableness, provided that the diversification is suffi 
ciently increased. 
This paradox is derived directly from exploiting 
the old-fashioned fear of common stocks and the 
consequent refusal to deal in them, except well be- 
low their “mathematical value.” 
Now, the mathematical value of a prize at stake 
is that prize multiplied by the chance of winning 
it. If a man stakes a dollar on “heads” coming up, 
the mathematical value of that chance is exactly fifty 
cents, because there is exactly one chance in two 
that “heads” will come up. If the prize at stake is